TMB Thanachart reported a net profit of 5,230 million baht in Q3/2024 from cost management in line with revenue, reduced provisions, and a net profit for the first 9 months of 15,919 million baht. NPLs were at a low level of 2.7%, continuing to take care of customers in line with sustainable debt resolution and responsible and fair lending, as well as measures to help customers affected by floods.
Thanachart Bank Public Company Limited or TMB Thanachart (TTB) announced its operating results for the third quarter and the first nine months of 2024. The bank and its subsidiaries continued to perform in line with the target and reported a net profit of 5,230 million baht in the third quarter of 2024. The main supporting factors were cost management in line with income and lower provisioning expenses from the previous quarter, which was a result of asset quality management in line with the target. As a result, the net profit for the first nine months of 2024 was 15,919 million baht.
Mr. Piti Tantiyaksem, Chief
Executive Officer of TMB Thanachart, revealed that the economic situation in the third quarter remains challenging and creates pressure on both income and asset quality, no different from the first half of the year. The bank therefore continues to focus on cost management in line with income, along with careful asset quality management to control risk costs and manage the NPL ratio to be at a low level. What has been added is the acceleration of the ‘resilient measures’ to help loan customers affected by the floods, covering both SME and retail customers.
The overall performance in Q3/2024 was considered to be in line with the target. The main supporting factor is still the effective cost management in 3 main areas: financial cost, operating cost, and risk cost or expenses in setting up provisions. In terms of financial cost, the Bank has proactively managed its asset and liability portfolios through various methods, such as adjusting the loan structure to be more appropriate, growing deposits to be in line
with the loan trend, and adjusting the investment portfolio strategy to cope with volatility and benefit from the direction of interest rates in the money market.
In terms of operating costs, the Bank also emphasizes cost discipline, focuses on investment that is in line with the strategy and improves customer service. In addition, it continues to develop digital potential and add new capabilities in mobile applications to encourage transactions via digital channels, which has a positive effect on the cost structure of services, resulting in the ability to manage operating expenses according to targets.
For risk cost management, the Bank continues to emphasize the growth of quality new loans by extending the Ecosystem Play concept, combined with the strengths of expertise and market leadership in offering loans to homeowners, car owners, and salaried employees. The Bank understands the needs and risks of its customers very well. At the same time, it closely takes care of all customer groups in order to be a
ble to reach and help customers who are experiencing liquidity problems in a timely manner. The Bank has various debt restructuring approaches to meet customers’ problems, along with proactively solving NPL problems, resulting in the overall asset quality being in line with the criteria. The Bank is therefore able to control risk costs or provisioning expenses according to the plan.
The bank continues to take care of customers in line with the responsible lending approach and the government’s household debt resolution. The Debt Consolidation project is one of our ongoing projects to help debtors manage their liquidity in the long term. Currently, there are more than 31,000 customers participating in this project, up from 17,000 at the end of last year. The bank has helped this group of customers reduce their interest burden by more than 1.9 billion baht.
For the operating results in Q3 and 9M2024, they are as follows:
Loans at the end of Q3/2024 were 1,253 billion baht, a 5.7% decrease from the end of 2023
(YTD), in line with the prudent loan growth approach. Target loan groups continued to expand, including home loans for cash (+10% YTD), car loans for cash (+6% YTD), and personal loans (+9% YTD). The decrease in total loans was mainly due to debt repayments by large corporate customers, a slowdown in hire purchase loans, in line with the still-sluggish automotive market, and proactive NPL management through sales and write-offs, resulting in a 2% YTD decrease in NPLs.
Deposits were THB1,296 billion, down 6.5% YTD, in line with the liquidity management plan and to balance the slowing growth trend of new loans. The decrease in deposits was mainly from high-cost deposits, while deposits from retail customers continued to expand, such as ttb all free deposits that offer transaction privileges and accident insurance. Despite the decrease in deposits, the bank’s liquidity remains high, as reflected by the loan-to-deposit ratio (LDR) of 97%, which is a result of the bank expanding deposits by more than 4.3% since Q
4/2023 to prepare for operations in 2024, giving it good flexibility in managing funding costs.
In the third quarter of 2024, the Bank had total operating income of 17,225 million baht, while operating expenses were 7,295 million baht. As a result, in the first 9 months of 2024, total operating income was 52,266 million baht, relatively flat compared to the same period last year. Operating expenses were 22,075 million baht, down 3.8% from the previous year, reflecting effective cost management.
In terms of NPL management, the Bank focuses on managing the NPL reduction process through sales and write-offs effectively. As a result, the NPL level at the end of September 2024 was 40,224 million baht, down 2% YTD, or a NPL ratio of 2.7%, which is considered low. The NPL reserve ratio remains high at 149%, in line with the target.
From the overall picture of asset quality that meets the control criteria, the provisioning expenses amounted to 4,764 million baht in Q3, a decrease of 10% from the previous quarter.
For the first 9 months of 2024, the total provisioning was 15,162 million baht, an increase compared to the first 9 months of 2023 because since the beginning of the year, the bank has set aside Management Overlay provisions in addition to provisioning from normal operations (Normal Provision) to increase its strength in withstanding economic uncertainty. After deducting provisions and taxes, the bank reported net profits for the third quarter and the first 9 months of 2024 at 5,230 million baht and 15,919 million baht, respectively.
While the capital position remains high and stable, at the end of Q3 2024, the total capital adequacy ratio (CAR) was 19.7% and the Tier 1 capital ratio was 17.3%, an increase from the previous quarter. Overall, the capital level is still considered among the highest in the industry and is higher than the minimum criteria for D-SIBs set by the BOT at 12.0% for CAR and 9.5% for Tier 1.
‘For the rest of the year, the bank will continue to emphasize prudent business practices to h
edge against risks that may arise from the still-uncertain economic outlook. However, with its current financial position that is strong in all dimensions, we are confident that TTB is ready to handle various factors and can continue its commitment to all stakeholders as targeted,’ said Mr. Piti.
Source: Thai News Agency
